Corporate and business taxes

Employee share schemes and ownership trusts

Employee share schemes help to incentivise, motivate, recruit and retain your best people and they provide employers with a tax efficient way to reward their employees.

Employee share schemes, such as the Enterprise Management Incentive (EMI) scheme, can give your employees a direct financial interest in the future success of your business – and there are significant tax reliefs available to the company and the employee.

The schemes can also be beneficial if you are you are considering selling your business, or taking a step back into semi-retirement or bringing in a new management team – they are a good way of keeping the key members of the team in place during this transitionary phase.

Employee Ownership Trusts

Employee Ownership Trusts (EOT) have grown in popularity as they become a viable business succession option for owners who want to transfer ownership to their employees.

An EOT is a tax incentivised means of transferring ownership and control of the business for the benefit of the employees.

The main benefit to the owner-manager is that there is no capital gains tax to pay on the sale if the ownership passes into an EOT. 

Under an EOT the employees do not directly own the shares; the shares are held in the trust and these are used to the benefit of the employees e.g. annual bonus based on company performance.

It also means that today’s employees and any future employees of the business will benefit from the EOT as it is the employees who benefit rather than individual employees owning shares – as is the case with EMI schemes. 

We can help you to review the various options and schemes that offer the most tax and commercial benefits to the business and its employees.

Our services include:

  • Advise you on the type of scheme best suited to your business and your objectives e.g. reward/incentivise employees, recruitment/retention, business succession, retirement/exit planning.
  • Discuss options and meet the number of requirements and eligibility criteria required to be satisfied for employee schemes. Discuss the various elements and the scheme set up process with you and liaise with HMRC to achieve the approval required and register the scheme with HMRC. 
  • Set up the scheme for you to ensure it maximises the tax benefits to the company, the employees and the current owner-manager(s).
  • Prepare your share scheme valuation and advise on the share option scheme – and its impact on your profit & loss and balance sheet.

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Our Corporate and business taxes Expert Emily Wilson

Emily Wilson is ammu’s corporate and personal tax associate with a first class honours degree in accounting and finance. Emily also attained further qualifications from the Association of Tax Technicians (ATT) and the CTA from Chartered Institute of Tax.